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Aravali Securities and Finance Ltd.

BSE: 512344 | NSE: ARAVALISEC | Series: NA | ISIN: INE068C01015 | SECTOR: Finance - Investments

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Aravali Securities and Finance is not listed on NSE

Annual Report

For Year :
2015 2014 2013 2012 2011 2010 2009 2008 2006

Director’s Report

Dear Members, The Directors take the pleasure in presenting their Report and Audited Financial Statement of the Company along with Auditors'' Report thereon for the year ended 31st March, 2015. (Rs. in Lakh) 2014-15 2013-14 WORKING RESULTS Profit/(Loss) before interest, (112.58) 175.82 depreciation and taxes Less: Interest 166.55 152.28 Profit/(Loss) before depreciation, (279.13) 23.54 NPAs and Taxes Less: Depreciation 10.70 6.62 Profit/(Loss) Before Taxation (289.83) 16.92 Less : Provision for Income Tax Current Tax - 5.23 Deferred Tax - 156.98 In respect of earlier years 1.37 0.05 Profit/ (Loss) after Taxation (291.19) (145.34) Add: Balance brought forward from (311.96) (166.62) previous year Less: Adjustment relating to Fixed Assets 3.71 - CLOSING BALANCE (606.86) (311.96) DIVIDEND The directors are not recommending any payment on account of dividend. MANAGEMENT DISCUSSION AND ANALYSIS A. FINANCIAL REVIEW Your Company has a loss of Rs. 289.83 lakh after depreciation and interest. Further, a provision for income tax in respect of earlier years of Rs. 1.36 lakh has been made in the accounts. The loss of Rs. 606.86 lakh including brought forward loss of Rs. 311.96 lakh has been carried to the Balance Sheet. B. RESOURCES AND LIQUIDITY The Company, as in the past, is not relying on any borrowing except unsecured loans to fund its activities. C. INDUSTRY STRUCTURE AND DEVELOPMENTS The Non Banking Financial Companies (NBFC) sector is still struggling for its growth in India. The NBFC sector is doing much better all over the world as compared to Asian Countries as the general perception about NBFC in the mind of public is still hazy. Other reason may be the excess regulatory requirements by the Reserve Bank of India which constituted a hurdle for its growth in India. Except few NBFC''s no other company is working well. This has created a very discouraging situation for the remaining NBFC who have no option except to diversify from its business of financing. Entrance of banks in consumer durable financing as well as in housing finance has brought forth a huge competition and has also added to worst scenario for the NBFC''s. This has virtually put a stop on private financing and most of the Non-Banking Finance Companies are out of this business. D. BUSINESS OVERVIEW Your company being classified as an Investment Company is doing long term and short term investments. No further opportunity has come to diversify the business of the Company as business of financing is no more lucrative. However your board is in constant look out for the new business avenues which can be taken with the existing business. E. OPPORTUNITIES AND THREATS Due to recession all over the world, the Indian economy, though not affected substantially, has suffered and the opportunities have become limited in all sphere of businesses. The financial market has suffered a lot and the business for NBFC''s have further reduced. This did not discourage the board of directors of your Company who are constantly looking for an opportunity to expand the business of the Company. Your Company being in the financial services sector is facing a very stiff competition from public sector as well as private sector banks and financial institutions. It is trying to cope up with the same but is finding it difficult to match up with them in expertise as well as finances available. However, the Company is trying its level best to achieve the same level of competence to meet the challenges thrown in this sector. F. OUTLOOK Your Company is still in the process of consolidation and has not decided to enter into new field. It is exploring various business opportunities but nothing concrete has been derived. Barring unforeseen circumstances your directors hope to find some concrete business opportunity to expand the business of the Company. G. RISK AND CONCERN Your Company at present is exposed to the normal industry risk factor of volatility in interest rate, economic cycle and credit risk. It has not yet decided its future course of activities. The impact of new activity, as and when decided, will be known in the future. H. ADEQUACY OF INTERNAL CONTROL The established Internal Control Systems of your Company are adequate to ensure that all the activities are monitored and controlled against any misuse or misappropriation of asset and that the transactions are authorized, recorded and reported correctly. More so, these internal control systems are regularly monitored by the audit committee of your Company and are improved upon on regular basis. FIXED DEPOSITS: Your Company does not accept fixed deposits from public and to this effect an undertaking is given to the Reserve Bank of India. DIRECTORS AND KEY MANAGERIAL PERSONNEL: Mr. Gautam Khaitan, Non-executive Director of the Company and Mr. R. A. Kila, Independent Director of the Company resigned as directors of the Company w.e.f. 23.07.2014 and 26.12.2014 respectively due to their personal reasons. As per Section 149 and other applicable provisions of the Companies Act, 2013, your Directors are seeking appointment of Mr. Suresh Kumar Lakhotia (DIN:00450723), as Independent Director of the Company for 5 (five) consecutive years for a term up to the conclusion of the 40th Annual General Meeting of the Company in the calendar year 2020. In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mrs. Malvika Poddar (DIN:00457245), Director of the Company retire by rotation and being eligible offer herself for re-appointment. The Company received declaration made by the independent directors of the Company that they fulfill the criteria given under Section 149(6) of the Companies Act, 2013 and other applicable provisions. The Nomination & Remuneration Committee (NRC) shall evaluate the performance of each Director of the Company with reference of the authority under the Nomination and Remuneration Policy of the Company framed in accordance with the provisions of Section 178 of the Companies Act, 2013 and based on their functions as mentioned in the Code of Conduct of the Directors. Evaluation of Independent Directors shall be carried on by the entire Board in the same way as it is done for the Executive Directors of the Company except the Director getting evaluated. The detail process of evaluation and ratings thereon are mentioned in the policy. SUBSIDIARIES, JOINT VENTURES, ASSOCIATE COMPANIES The Sirpur Paper Mills Ltd. - Associate Company Carma Arts & Crafts Private Ltd. - Associate Company Devi Overseas Private Ltd. - Associate Company Devi Developers Private Ltd. - Associate Company Boutique Hotels India Private Ltd. - Associate Company CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES Particulars of contracts/arrangements entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 were in ordinary course of business and on an arms length basis are provided in Annexure-A to this report in Form no. AOC-2. AUDITORS AND AUDITOR S REPORT: M/s. Salarpuria & Partners, Chartered Accountants, Statutory Auditors of the Company, retire at the conclusion of the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. Auditors in the annexure to their report have drawn attention to the Point No. ii(c) stating that certain shares are not registered in the name of the Company. The same are on account of bad delivery, for which efforts are being made to sort out the same. Further with respect of Point No. ix, the notes on financial statement reffered to in the Auditor Report are self explanatory and do not call for any further comment. SECRETARIAL AUDIT REPORT: A Secretarial Audit Report given by Mr. Nitesh Kumar Sinha, Practising Company Secretary (Membership no. F7536) is given in Annexure-B to this report. EXTRACTS OF ANNUAL RETURN: The details forming part of the extract of the Annual Return is given in Annexure-C to this report. BUSINESS RISK MANAGEMENT: Pursuant to Section 134 (3) (n) of the Companies Act, 2013 and clause 49 of the Listing Agreement, the Company has constituted a business risk management committee. The details of the committee and its terms of reference are set out in the corporate governance report forming part of the board report. At present the Company has not identified any element of risk which may threaten the existence of the Company. ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES: Whistle blower Policy is formulated to encourage all employees and directors of the Company to report any unethical behavior, actual or suspected fraud or violation of the Code of the Company and to provide a secure environment to such employees acting in good faith and safeguarding them from any adverse action by the management. This policy is in line with the requirements of the revised Clause-49 of the Listing Agreement with the Stock Exchanges and the provisions of the Companies Act, 2013 (Sub- section 9 of Section 177) read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, which stipulated that every Listed Company shall establish a Vigil mechanism. CORPORATE GOVERNANCE: Your Company has taken adequate steps to ensure that all mandatory provisions of ''Corporate Governance'' as provided in the listing agreement of the Stock Exchanges with which the Company''s shares are listed, are duly complied with. A Certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance is given in Annexure-D to this report. DIRECTORS'' RESPONSIBILITY STATEMENT: Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, with respect to Directors'' Responsibility Statement, it is hereby confirmed that: (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period; (c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (d) the directors had prepared the annual accounts on a going concern basis; and (e) the directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. (f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. PARTICULARS OF EMPLOYEES: The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees'' particulars which is available for inspection by the members at the Registered office of the Company during business hours on working days of the Company up to the date of ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the Company Secretary in advance. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: The Company being engaged in the financial services and trading, does not have any energy utilization or technology absorption. The Company during the year under consideration has not earned or spent any foreign exchange. ACKNOWLEDGEMENT: Your Company and its Directors wish to extend their sincerest thanks for the co-operation received from shareholders, bankers and other business constituent during the year under review. Your directors also wish to place on record their deep sense of appreciation for the commitment displayed by all employees of the Company. Date: 21st May, 2015 By Order of the Board of Directors Sd/- Ranjan Kumar Poddar Chairman & Managing Director (DIN:00290949)

Director’s Report